Critical Analysis: Tractor Supply (TSCO) versus its Competitors
Tractor Supply (NASDAQ: TSCO) is one of 21 public companies in the “Other Specialty Retailers” industry, but how does it weigh in compared to its competitors? We will compare Tractor Supply to related businesses based off the strength of its earnings, profitability, risk, valuation, institutional ownership, dividends and analyst recommendations.
Insider & Institutional Ownership
92.3% of Tractor Supply shares are owned by institutional investors. Comparatively, 62.0% of shares of all “Other Specialty Retailers” companies are owned by institutional investors. 1.2% of Tractor Supply shares are owned by insiders. Comparatively, 22.7% of shares of all “Other Specialty Retailers” companies are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
This table compares Tractor Supply and its competitors’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Tractor Supply Competitors||21.96%||-15.12%||6.27%|
This is a summary of current ratings and price targets for Tractor Supply and its competitors, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Tractor Supply Competitors||382||1016||1082||48||2.31|
Tractor Supply currently has a consensus target price of $70.47, indicating a potential upside of 16.85%. All “Other Specialty Retailers” companies have a potential upside of 3.45%. Given Tractor Supply’s stronger consensus rating and higher probable upside, research analysts clearly believe Tractor Supply is more favorable than its competitors.
Valuation and Earnings
This table compares Tractor Supply and its competitors revenue, earnings per share (EPS) and valuation.
|Gross Revenue||EBITDA||Price/Earnings Ratio|
|Tractor Supply||$7.04 billion||$849.82 million||18.17|
|Tractor Supply Competitors||$3.37 billion||$365.11 million||5.98|
Tractor Supply has higher revenue and earnings than its competitors. Tractor Supply is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently the more expensive than other companies in its industry.
Tractor Supply pays an annual dividend of $1.08 per share and has a dividend yield of 1.8%. Tractor Supply pays out 32.5% of its earnings in the form of a dividend. As a group, “Other Specialty Retailers” companies pay a dividend yield of 1.1% and pay out 68.7% of their earnings in the form of a dividend. Tractor Supply is clearly a better dividend stock than its competitors, given its higher yield and lower payout ratio.
Risk & Volatility
Tractor Supply has a beta of 1.3, meaning that its stock price is 30% more volatile than the S&P 500. Comparatively, Tractor Supply’s competitors have a beta of 1.23, meaning that their average stock price is 23% more volatile than the S&P 500.
Tractor Supply beats its competitors on 11 of the 15 factors compared.
About Tractor Supply
Tractor Supply Company is an operator of rural lifestyle retail stores in the United States. The Company is focused on supplying the needs of recreational farmers and ranchers and others, as well as tradesmen and small businesses. It is engaged in the retail sale of products that support the rural lifestyle. The Company operates retail stores under the names Tractor Supply Company, Del’s Feed & Farm Supply and Petsense, and operates Websites under the names TractorSupply.com and Petsense.com. The Company’s selection of merchandise consists of various product categories, including equine, livestock, pet and small animal products; hardware, truck, towing and tool products; seasonal products, including heating, lawn and garden items, power equipment, gifts and toys; work/recreational clothing and footwear, and maintenance products for agricultural and rural use. Its brands include 4health, JobSmart, Bit & Bridle, Paws & Claws, Blue Mountain, Redstone, Dumor, Equistages and Royal Wing.
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